Issue: №10, 2019
Introduction. Price stability as well as exchange rate stability constitute the main signs of stability of the national currency unit. The National Bank of Ukraine views achievement of price stability as preservation of the capacity of the national currency through maintenance of low stable inflation rate in the mid term (from three to five years) and determines it as its core function. That makes financial institutions take into account the priorities set by the financial regulator for itself as well as to consider them in the performance of their mediatory functions. The purpose of the study is to determine the effect made by inflation on the entrepreneurial activity of the key participants of the domestic financial market. Results. Specific numeric parameters of the predicted inflation rate are indicated by the NBU almost every year in the Monetary Policy Guidelines. However, it rarely manages to perform the set task of achieving the target reference point for inflation. That has caused non-correspondence between interest rates for the core banking products and the actual situation in the economy. Profitability of collective investment schemes may have a negative value both in the years of deflation, and at a high rate of inflation. It happens so because the securities constitute the lion’s share of their assets, and their largest portfolio is made up by shares. Investment income of non-public pension funds in Ukraine in most years is much higher than the rate of inflation. Conservative inflation policy allows them to get a stable income secured by the state and banking institutions. Conclusion. In Ukraine price stability has the largest effect on the activity of banking institutes, among the main financial business entities. And the rate of inflation should be taken into account by the banks when they determine the prices of their deposit and credit services, since the interest for the deposit must be attractive for prospective investors, while the fee for credit should take into account the change in the value of money involved due to liability-related transactions, in time. Statistical data proves that for other financial business entities stability of a monetary unit is just one of many macroeconomic factors affecting their activity. References 1. The Law of Ukraine “On the National Bank of Ukraine” № 679-ХIV from 20.05.1999. URL: htpp://zakon1.rada. gov.ua/laws/show/679-14 (in Ukrainian). 2. Monetary Policy Guidelines. National Bank of Ukraine. URL: http://www.bank.gov.ua/control/uk/publish/category? cat_id=26491876 (in Ukrainian). 3. Statistics. National Bank of Ukraine. URL: http://www.bank.gov.ua/control/uk/publish/article;jsessionid=A5D50CD3DC94911BB4C001DD8B5E2692?art_id=65162&cat_id=36674 (in Ukrainian). 4. Statistical information. State Statistics Service of Ukraine. URL: http://www.ukrstat.gov.ua (in Ukrainian). 5. Quarterly & Annual Asset Management Industry Reviews. The Ukrainian Association of Investment Business. URL: http://www.uaib.com.ua/analituaib/publ_ici_quart.html (in Ukrainian). 6. Annual Report of National Commission For the State Regulation Of Financial Services Markets. National Com-mission For the State Regulation Of Financial Services Markets. URL: https://www.nfp.gov.ua/ua/Richni-zvity-Natskomfinposluh.html (in Ukrainian).
Keywords : inflation, bank, collective investment institution, non-government pension fund